SUNDER KESHWANI, Ajmer V. ITO, Ajmer

ITA 797/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1994 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 797/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 SHRI SUNDER KESHWANI B-456, PANCHSHEEL VAISHALI NAGAR, AJMER CUKE VS. THE ITO WARD- 1(2) AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACQPK 1040 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: WRITTEN SUBMISSION JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/03/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 14 /03/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), AJMER DATED 13-07-2016 FOR THE ASSESSMENT Y EAR 2012-13 RAISING THEREIN FOLLOWING GROUNDS:- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. (A) HAS ERRED IN CONFIRMING THE ADDITION OF :- ITA NO. 797/JP/2016 SHRI SUNDER KESHWANI VS. ITO, WARD 1 (2), AJMER . 2 (I) RS. 4,68,048/- FOR BOGUS CREDITOR / BALANCE AND RS. 14,760/- FOR UN-RECONCILED DIFFERENCE IN ACCOUN T OF M/S. SATGURU ELECTRICALS. (2) RS. 15,000/- FOR DISALLOWANCE OF VARIOUS EXPENSES. 2.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, THE BRIE F FACTS OF THE CASE AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS U NDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STA TEMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSION CAR EFULLY. IT IS SEEN THAT THE ACCORDING TO THE ASSESSEE, ALL THE TRANSACTIONS ENTERED INTO BY THE APPELLANT WITH M/S. SATGURU ELE CTRICALS DURING THE F.Y. 2011-12 ARE TALLIED WITH THE DIFFER ENCE IN THE BALANCE IN THE ACCOUNT OF M/S. SATGURU ELECTRICALS AS APPEARING IN THE BOOKS OF THE APPELLANT AND THE BAL ANCE IN THE ACCOUNT OF THE APPELLANT AS APPEARING IN THE BOOKS OF M/S. SATGURU ELECTRICALS. THE REASON FOR THE DIFFERENCE IN THE OPENING BALANCE AS EXPLAINED BY THE APPELLANT IS BE CAUSE OF THE FOLLOWING PAYMENT MADE BY THE DEBTORS OF THE AP PELLANT DIRECTLY TO M/S. SATGURU ELECTRICALS. JAI SHREE SHYAM AGENCY RS. 13,329/- DILIP JI RS. 1,75,071/- GUPTA ELECTRICASL RS. 1,63,935/- DATEWISE DETAILS OF PAYMENT OF CLAIMED TO HAVE BEEN MADE BY ABOVE REFERRED THREE PARTIES ON BEHALF OF THE AP PELLANT TO M/S. SATGURU ELECTRICALS HAS ALSO BEEN GIVEN BY THE APPELLANT. IT IS SEEN FROM THE DETAILS THAT ALL THE PAYMENTS ARE SHOWN TO HAVE BEEN MADE DURING THE F.Y. 2011-12 ONL Y. I FAILED TO UNDERSTAND HOW THE PAYMENTS MADE BY THESE PARTIES IN THE F.Y. 2011-12 WOULD EFFECT THE OPENING BALANC E AS ON 01-04-2011 IN THE ACCOUNT OF THE APPELLANT AS APPEA RING IN ITA NO. 797/JP/2016 SHRI SUNDER KESHWANI VS. ITO, WARD 1 (2), AJMER . 3 THE BOOKS OF M/S. SATGURU ELECTRICALS. FURTHER NO S UCH PAYMENTS CLAIMED TO HAVE BEEN MADE BY THESE PERSONS TO M/S. SATGURU ELECTRICALS ARE REFLECTED IN THE ACCOU NT OF THE APPELLANT THAT THE DIFFERENCE IN THE CLOSING BALANC E AS ON 31- 03-2012 IN THE ACCOUNT OF M/S. SATGURU ELECTRICALS WAS DUE TO THE PAYMENT DIRECTLY MADE BY ABOVE REFERRED THRE E PERSONS TO M/S. SATGURU ELECTRICALS ON BEHALF OF THE APPELL ANT, IS FOUND TO BE INCORRECT. HENCE, THE EXPLANATION FURNI SHED BY THE APPELLANT IS NOT FOUND TO BE ACCEPTABLE. ACCORD INGLY, THE ACTION OF THE AO TREATING THE UNRECONCILED DIFFEREN CE IN THE BALANCE APPEARING IN THE NAME OF M/S. SATGURU ELECT RICALS IS HELD TO BE FULLY JUSTIFIED AND IN ACCORDANCE WITH T HE PROVISIONS OF LAW. THE ADDITION OF RS. 4,68,048/-MA DE BY THE AO IS HEREBY CONFIRMED. (II) THE SECOND GROUND OF APPEAL IS RELATED TO THE FIRST GROUND OF APPEAL DECIDE ABOVE. THE ASSESSEE HAS SHO WN THE CREDIT BALANCE OF RS. 4,68,048/- IN THE NAME OF M/S . SATGURU ELECTRICALS WHEREAS IN THE BOOKS OF M/S. SATGURU EL ECTRICALS, THE ASSESSEE IS APPEARING AS CREDITOR FOR RS. 14,76 0/-. THE ASSESSEE HAS NOT SHOWN THE DEBTOR OF RS. 14760/- IN THE NAME OF M/S. SATGURU ELECTRICALS BUT M/S. SATGURU ELECTRICALS HAS SHOWN AS CREDITOR FOR RS. 4,68,048/-.THUS THERE IS A DIFFERENCE OF RS. 4,82,808/- IN THE BALANCE IN THE ACCOUNT OF M/S. SATGURU ELECTRICALS AS APPEARING IN THE BOOKS OF APPELLANT (RS. 4,68,048/- CR.) AND THE BALANCE IN T HE ACCOUNT OF THE APPELLANT AS APPEARING IN THE BOOKS OF M/S. SATGURU ELECTRICALS (RS.14,760/- DR.). THEREFORE, THE AO HA S TREATED THE UNRECONCILED BALANCE AS INCOME OF THE APPELLANT AND THE REMAINING ADDITION OF RS. 14,760/- HAS BEEN MADE AS THE DEBTOR NOT RECORDED IN THE BOOKS OF THE APPELLANT. AS THE EXPLANATION FURNISHED BY THE APPELLANT IN RESPECT O F THE DIFFERENCE IN THE BALANCES HAS ALREADY BEEN REJECTE D BY ME WHILE DECIDING GROUND NO. 1 ABOVE, THEREFORE, THE A DDITION OF RS. 14,760/- MADE BY THE AO IN RESPECT OF THE R EMAINING ITA NO. 797/JP/2016 SHRI SUNDER KESHWANI VS. ITO, WARD 1 (2), AJMER . 4 UNRECONCILED DIFFERENCE IN THE BALANCE IN THE ACCOU NT OF M/S. SATGURU ELECTRICALS IS ALSO CONFIRMED. 2.2 THE LD. DR DURING THE COURSE OF HEARING RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 2.3 WE HAVE HEARD THE LD. DR AND PERUSED THE MATER IALS AVAILABLE ON RECORD INCLUDING THE WRITTEN SUBMISSION OF THE ASSE SSEE. IT IS NOTED FROM THE RECORDS THAT THE ASSESSEE IS ENGAGED IN THE BUS INESS OF DISTRIBUTION CUM SUPPLY OF ELECTRICAL AND GENERAL PRODUCTS AND I S HAVING AGENCY OF M/S. CROMPTON GRAVES, M/S. BAJAJ BONTON, M/S. HALNI X ETC. THE ASSESSEE CARRIES ON HIS PROPRIETARY BUSINESS UNDER THE NAME OF M/S. MARINA ELECTRICALS. THE AO OBSERVED DURING ASSESSMENT PROC EEDINGS THAT THE ASSESSEE HAD SHOWN A TRADE LIABILITY AS SUNDRY CRED ITOR OF RS. 4,68,048.47 IN THE NAME OF. M/S. SATGURU ELECTRICALS. FURTHER A O ON EXAMINATION OF THE RECORDS OF THE SATGURU ELECTRICALS, THE AO OBS ERVED THAT THE ASSESSEE IS APPEARING IN THE BOOKS OF ACCOUNT OF M/S. SATGUR U ELECTRICALS AS DEBTOR FOR RS. 14,760/- AS AGAINST LIABILITY OF RS. 4,68,0 48/-. AFTER MAKING ENQUIRY, THE AO OBSERVED THAT SUNDRY CREDITOR OF RS . 4,68,048.47/- IS NOTHING BUT A CONCOCTED STORY BUILT BY THE ASSESSEE . AS PER THE AO, THERE WAS NO SUNDRY CREDITOR. THE AO THUS TAKING INTO CON SIDERATION THE ITA NO. 797/JP/2016 SHRI SUNDER KESHWANI VS. ITO, WARD 1 (2), AJMER . 5 SUBMISSIONS OF THE ASSESSEE AND COPY OF THE ACCOUNT OF M/S. SATGURU ELECTRICALS FOUND VARIOUS CONTRADICTION IN THE SUB MISSIONS OF THE ASSESSEE. FINALLY THE AO TREATED THE AMOUNT OF RS. 4,68,048/-AS BOGUS LIABILITY IN THE HANDS OF THE ASSESSEE IN ORDER TO SUPPRESS THE TRUE PROFITS WHICH HAS ALSO BEEN CONFIRMED BY THE LD. CIT(A) IN THE APPELLATE PROCEEDING. AS REGARDS THE ISSUE OF CREDIT BALANC E OF RS. 14,760/- IN THE ACCOUNT OF M/S. SATGURU ELECTRICALS, THE AO NOTED FROM THE COPY OF ACCOUNT OF M/S. SATGURU ELECTRICALS, AJMER THAT AS SESSEE IS SHOWN AS SUNDRY CREDITOR BY THEM AT RS. 14,760/-. THUS M/S. SATGURU ELECTICALS IS ASSESSEE'S DEBTOR FOR RS. 14,760/- AND THE ASSESSEE SHOULD HAVE BEEN APPEARED IN ITS ASSET SIDE OF THE BALANCE SHEET. HO WEVER, INSTEAD OF SHOWING M/S. SATGURU ELECTRICALS IN THE ASSET SIDE OF BALANCE SHEET FOR RS. 14,760/-, THE ASSESSEE HAS SHOWN M/S. SATGURU E LECLTRIALS AS SUNDRY CREDITOR WHICH HAS BEEN NOTICED BY THE AO DURING AS SESSMENT PROCEEDINGS ORDER. THUS ACCORDING TO THE AO, IN ACT UAL, ASSESSEE'S ASSETS SHOULD HAVE BEEN INCREASED BY RS. 14,760/-. THE AO OBSERVED THAT ASSET IS SUPPRESSED TO THE EXTENT OF RS. 14,760/- AND HE ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS HIS UNRECORDED INCOME WHI CH HAS BEEN ITA NO. 797/JP/2016 SHRI SUNDER KESHWANI VS. ITO, WARD 1 (2), AJMER . 6 SUSTAINED BY THE LD. CIT(A) IN THE APPELLATE PROCEE DINGS. IT IS NOTED FROM THE AVAILABLE RECORDS THAT THE CONTENTIONS OF THE A SSESSEE AS EMERGES FROM THE WRITTEN SUBMISSION DOES NOT SATISFY THE OBJECTI ONS RAISED BY THE LOWER AUTHORITIES IN CONFIRMING THE ADDITIONS AS RAISED I N GROUND NO. 1 OF THE ASSESSEE. IN SUCH A SITUATION, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THUS GROUND NO. 1 OF THE ASSESSE E IS DISMISSED 3.1 APROPOS GROUND NO. 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STA TEMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSION CAR EFULLY. IN VIEW OF THE FACTS DISCUSSED BY THE AO IN THE ASSESSMENT ORDER, I AM OF THE CONSIDERED VIEW THAT SOME DISALLOWANCE OUT OF V ARIOUS EXPENSES WAS REQUIRED TO BE MADE BY THE AO. HOWEVER , THE DISALLOWANCE MADE BY THE AO APPEARS TO BE ON HIGHER SIDE. I AM OF THE CONSIDERED VIEW THAT IT WOULD BE FAIR AND REAS ONABLE TO RESTRICT THE DISALLOWANCE OUT OF VARIOUS EXPENSES TO RS. 15, 000/-. ACCORDINGLY, THE DISALLOWANCE OUT OF ABOVE EXPENSES IS RESTRICTED TO RS. 15,000/- AND THE APPELLANT GETS RELIEF OF RS . 35,000/- 3.2 DURING THE COURSE OF HEARING, THE LD. DR SUPPOR TED THE ORDER OF THE LD. CIT(A). 3.3 WE HAVE HEARD THE LD. DR AND PERUSED THE MATER IALS AVAILABLE ON RECORD INCLUDING THE WRITTEN SUBMISSION OF THE ASSE SSEE. IT IS NOTED FROM ITA NO. 797/JP/2016 SHRI SUNDER KESHWANI VS. ITO, WARD 1 (2), AJMER . 7 THE AVAILABLE RECORDS THAT THE ASSESSEE IN THE PROF IT AND LOSS ACCOUNT HAD DEBITED THE FOLLOWING EXPENSES AMONG OTHER EXPENSES . HEAD OF EXPENSES AMOUNT POWER AND FUEL 93,254 INSURANCE 11,600 SHOP EXPENSES 1,06,353/- TRAVELLING EXPENSES 67,731/- TOTAL 2,78,938/- THE AO DURING VERIFICATION OF SUCH EXPENSES AND ITS CONNECTING VOUCHERS SUMMARILY OBSERVED THAT THE AO HAS NEITHER MAINTAIN ED PROPER RECORDS OF THE EXPENSES NOR SUPPORTING BILLS / VOUCHERS WERE P RODUCED BEFORE THE AO. THE AO ALSO OBSERVED THAT THE ASSESSEE WAS NOT HAVING SEPARATE VEHICLE FOR PERSONAL USE AND FAMILY AND NO LOG BOOK WAS MAINTAINED. MOST OF THE BILLS AND VOUCHERS WERE SELF MADE VOUC HERS FOR WHICH THE AO OBSERVED THAT THERE WAS POSSIBILITY LEAKAGE OF REVENUE. FOR WANT OF SUCH DEFICIENCY IN THE BILLS AND VOUCHERS OF THE AS SESSEE'S EXPENSES AS MENTIONED ABOVE, THE AO DISALLOWED A LUMPSUM AMOUNT OF RS. 50,000/- WHICH WAS RESTRICTED TO RS. 15,000/- BY THE LD. CIT (A) GRANTING RELIEF OF RS. 35,000/- TO THE ASSESSEE IN THE FIRST APPEAL. THE BENCH HAS TAKEN INTO CONSIDERATION THE WRITTEN SUBMISSION OF THE ASSESSE E BUT THE ASSESSEE DID NOT PROVIDE THE SUPPORTING BILLS/ VOUCHERS FOR PROP ER CONTESTING ITS CASE. ITA NO. 797/JP/2016 SHRI SUNDER KESHWANI VS. ITO, WARD 1 (2), AJMER . 8 IN PRESENT FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE LD. CIT(A) HAS RIGHTLY GRANTED THE RELIEF TO THE ASSESSEE TO T HE TUNE OF RS. 35,000/- AND WE FIND NO REASON TO INTERFERE WITH HIS ORDER. THUS GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 /03/201 8. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; /JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14 /03/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SUNDER KEHSWANI, AJMER 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1 (2) , AJMER 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 797/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR